Reistration

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2010 One of company is providing services of Interior Decorator but in some cases it provides goods supply in Interior Decoration
How it will be Taxable under Service Tax i.e. as Interior Decorator or any other
and what will be the rate??? how it will be taxed under Service TAx??

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

24 August 2010 Goods suppl will not taxable under Service tax, the same will be taxed under VAT. so need to calculate VAT on goods

Jitender

Jitender (Expert)
Follow

24 August 2010 i also agree with the above view.

Upgrade to CAclubindia Pro. Subscribe Now!

Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2010 What will be the treatment of goods supplied in respect of Service Tax ,Suppose contract for Interior decoration is inclusive of material ex Contract inclusive of material @ Rs1500000 and material used in Interior Contract Rs400000 What amount will be taxable as Service Tax & as sales Tax,whether in case of sales Tax required to be register as Works Contractor or Other category???

How invoice/receipt will be issued for the same in case Advance is received as advance will be for both material& Services??

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

25 August 2010 You cannot register under Works contract since the Interior decoration is separate Serive category, so Material supply will not attract ST, but attract VAT. so need to register under VAT also and clarfication please read below

Definition:

“Interior decorator” means any person engaged, whether directly or indirectly, in the business of providing by way of advice, consultancy, technical assistance or in any other manner, services related to planning, design or beautification of spaces, whether man-made or otherwise and includes a landscape designer.

(Section 65 (34) of Finance Act, 1994 as amended)

Taxable event and scope of service:

Taxable service means any service provided to a client, by an interior decorator in relation to planning, design or beautification of spaces, whether man-made or otherwise, in any manner.

(Section 65(72)(q) of Finance Act, 1994 as amended)

The project which started before 16th Oct., 1998 and still continuing after 16th Oct., the Service Tax is payable only in respect of services rendered on or after the date on which the Service Tax provisions came into force i.e. 16th October, 1998. Service Tax is not required to be paid on payment received for services rendered prior to the service concerned being notified.

(Ministry’s F.No.B-11/3/98-TRU dt.07.10.1998)

Value of Taxable Service:

Value of the taxable service in relation to the service provided by an interior decorator to a client, shall be the gross amount charged by such decorator from the client for services rendered in relation to planning, design or beautification of spaces in any manner.

(Section 67 of Finance Act, 1994 as amended)

Exemption and Exclusion:

1. In cases where an interior decorator sub-contracts part/whole of his work to another interior decorator, no Service Tax is required to be paid by the sub-contractor provided that the princip al interior decorator has paid the Service Tax on the services rendered by him to the client and provided the sub-contracting is in respect of the same service category.

2 The services rendered by Art directors of films and others who render services of design etc. for setting up temporary structures/settings for shootings, etc. do not attract Service Tax as such interior decoration has no permanency and is only of a temporary nature.

3 The Service Tax is not leviable on supply of materials, items of furniture or decoration, per se, but only on services rendered in any manner concerning planning, design or beautification of spaces.

4 Out of pocket expenses which are reimbursable on actual basis, such as traveling, boarding and lodging expenses are not includible in the value for levy of Service Tax. The assessee is required to produce documentary evidence for the purpose.

(Ministry’s F.No.B-11/3/98-TRU dt. 07.10.1998)

Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2010 So what will be the value of Taxable Service in case of above example.
Whether in Case of VAT How will be Value of sales be determined or required to register as works contractor under Sales Tax

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

25 August 2010 My suggestion better you go for regular scheme registration instead of WCT, becasue you can avail the Input VAT on purchase, while avaliling the input your VAT liability may be 0 if you are not charged any margin on material